New on-line VAT reporting system

The Spanish Ministry of Finance has approved a new reporting system of VAT information to the Tax Authorities called SII (Suministro Inmediato de Información). The new system proposes the information contained in the current VAT books to be reported by electronic means practically in real time to the Tax Authorities. This represents a major challenge for taxpayers in the context of VAT compliance. Please see below a summary of the main aspects of the new system:

1. VAT taxpayers subject to SII

• Taxpayers with revenue higher than EUR 6.010.121’04 in the previous year.
• Taxpayers registered with the monthly VAT refund system.
• Taxpayers subject to the VAT Group regime.
• Taxpayers opting for the SII. The option shall be filed in November of the prior year (in June 2017 for 2017 only) and will remain in force until a waiver is filed, with one year as a minimum.

2. VAT information to be reported and deadlines

A. Output VAT book

• Information to be reported: In addition to the current information being required as of today, new pieces of information shall be reported such as the description of the operations and the specific VAT references to be made according to the law (for example, reverse-charge rule).
• Deadline: Information shall be reported within a 4 day period after the issuance of the invoice (8 days in 2017 only) or, in any event, before day 16 of the following month after the period in which VAT is triggered. Saturdays, Sundays and national bank holidays are disregarded for deadline purposes.

B. Input VAT book

• Information to be reported: In addition to the current information being required as of today, new pieces of information shall be reported such as deductible input VAT.
• Deadline: Information shall be reported within a 4 day period after the accounting registration of the invoice (8 days in 2017 only) or, in any event, before day 16 of the month following the monthly period in which operations are included. Saturdays, Sundays and national bank holidays are disregarded for deadline purposes.

C. Fixed assets book

• Information to be reported remains as of today.
• Deadline: Within the period available to file the last VAT return of the year.

D. Book for certain intra-community operations

• Information to be reported remains as of today.
• Deadline: Information shall be reported within a 4 day period after the date of dispatch or, in any event, after goods receipt (8 days in 2017 only). Saturdays, Sundays and national bank holidays are disregarded for deadline purposes.

3. Other SII effects

• No obligation to file the yearly declaration of transactions with third parties, form 347 for taxpayers applying SII.
• No obligation to file the monthly VAT information form 340 for taxpayers applying SII.
• Extension of deadline to file VAT monthly returns to 30 days after month-end for taxpayers applying SII, replacing the current 20 day deadline. The deadline will be extended to the end of February for the VAT return corresponding to January.
• Information reported through the new SII system shall be available for taxpayers subject to SII as an instrument to help preparing their corresponding VAT returns.

4. Entry into force

The new SII system will come into force on 1st July 2017. However, VAT payers subject to SII will also be obliged to file the VAT information corresponding to the first semester of 2017 in the period 1st July to 31st December 2017.

It is worth noting that new rules may be expected in the future in connection with (i) additional information to be reported in the context of SII, (ii) the web service or the electronic questionnaire to channel the information supply, and (iii) no obligation to file the VAT yearly summary return, form 390.

Finally, it must be noted that the deadline for the remittance of invoices to the recipient has been amended with effects 1st January 2017: When the recipient is an entrepreneur, invoices shall be remitted before day 16 of the month following the period in which VAT corresponding to the transaction is triggered, replacing the one month period after issuance of invoices in force as of today.